Discrimination in Design of an Rx Drug Insurance Program?

Joseph L. Fink III, BSPharm, JD

Published Online: Tuesday, August 1, 2006

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Issue of the Case

All female employees of the Union
Pacific Railroad Co filed suit against their
employer claiming that failure to include
coverage for contraceptives in the health
insurance benefit plan was discriminatory
and violated Title VII of the Civil Rights Act
of 1964 as amended by the Pregnancy
Discrimination Act of 1978. Members of
the class of employees filing this class
action lawsuit were female employees
who were enrolled in the employer's
health insurance plan as a fringe benefit
and who used prescription contraceptives
at least in part to prevent pregnancy. The
core allegation was that the selective
exclusion of the FDA-approved prescription
contraceptives was discriminatory
action by the employer.

Facts of the Case

The Union Pacific Railroad had about
48,000 employees, approximately 1300
women who were covered by the collective
bargaining agreement that led to the
fringe benefit offering. Of that number, it
was estimated that about 450 female
employees were of childbearing age.

In fact, the employer offered 5 different
health insurance benefit plans to its
male and female employees. Those plans
covered a variety of prescription medication
products that the plaintiffs viewed
as "preventive" blood pressure and
cholesterol-lowering drugs, hormone
replacement therapy, immunizations,
etc. Moreover, the plans covered services
that could be classified as preventive,
such as routine physicals, cancer screening
tests, smoking cessation programs,
and dental examinations and cleanings.

The fringe benefit plans did exclude
from coverage or provide for limitations
on coverage for fertility, infertility, and family
planning services. Sterilization procedures
and procedures to facilitate pregnancy
were excluded, as was coverage
for prescription contraception to prevent
pregnancy. The court did note that "all 6
available methods of prescription contraception
are used exclusively by
women"oral contraceptive tablets,
intrauterine devices, Depo-Provera injections,
barrier methods such as a
diaphragm or cervical cap, contraceptive
patches, and the contraceptive ring. The
benefit plans would provide coverage for
prescription contraceptives only if prescribed
for "noncontraceptive purposes."

The Court's Ruling

The court granted summary judgment,
meaning that it ruled in favor of the plaintiffs/
employees without conducting a
fully developed trial process. The court
concluded that the insurance plans did
violate the federal statute in question,
"because they treat medical care
women need to prevent pregnancy less
favorably than it treats medical care
needed to prevent other medical conditions
that are no greater threat to
employees' health than is pregnancy."

The Court's Reasoning

The court started by looking at the
Pregnancy Discrimination Act of 1978,
the statute relied on by the women
employees. It is part of the Civil Rights
Act of 1964, a statute that prohibits
employment discrimination based on
color, national origin, race, religion, and
sex. The judge concluded that the statute
applies to women affected by pregnancy,
as well as to women who are indeed
pregnant. As a result, the insurance
plans challenged in this case must treat
the risk of pregnancy no less favorably
than the health plans treat other similar
health risks. The employer's health plans
cover a number of other products and
services designed to prevent adverse
health events and consequences, an
approach the judge referred to as "comprehensive."
To exclude coverage for
prescription contraceptives violates Title
VII of the Civil Rights Act of 1964 as
amended by the Pregnancy Discrimination
Act of 1978.

The defendant/employer unsuccessfully
argued that providing coverage for
these gender-specific medications would
increase the cost of health insurance.
The judge conceded that this might in
fact be true but that this argument was
trumped by the provisions of the federal
statutes in question. Attorneys for the
railroad also advanced the innovative
argument that the "imminent" development
of male contraceptives available by
prescription would eliminate the basis
for this suitdiscrimination on the basis
of sex. The judge rejected that argument
as well, observing that "the exclusion of
coverage for prescription contraceptives
for men and women would still affect
only the health of women." Consequently,
the net effect would still be
discriminatory.

Interestingly, the judge went on to
acknowledge that health benefit policy
inclusion and exclusion decisions by the
employer to deny coverage for fertility
treatments or sterilization procedures
could apply equally to both male and
female employees and not violate the
statutes in question here. Yet, plan structures
or policies that deny coverage for
contraceptives affect only the health of
women, regardless of whether contraception
medication for men is available.

Dr. Fink is professor of pharmacylaw and policy at theUniversity of KentuckyCollege of Pharmacy,Lexington.